[1] The validity of an agreement between labor and management that excludes benefits that may be included in average wages from the calculation of retirement allowances (the validity of limited terms) and whether such agreement may be made implicitly (affirmative)

[2] The case holding that there exists an implied agreement between labor and management to exclude transportation expenses and holiday work allowances from the basic wages for calculation of retirement allowances, and that such agreement is valid

[1] The provisions of the Labor Standards Act on retirement allowance pay provide the lowest limit of the amount of retirement to be paid to the retired employee. Thus, there exists a separate agreement between the labor and management to choose not to base the calculation of the amount of retirement allowance which may be included in the average wage as stipulated in the Labor Standards Act in light of the nature of the benefits, and if the amount of retirement allowance calculated under the agreement exceeds the lowest limit guaranteed by the Labor Standards Act, such agreement shall not be deemed null and void as it violates Article 34 of the Labor Standards Act, and such

[2] The case holding that such an agreement cannot be deemed to violate the Labor Standards Act, inasmuch as it is sufficiently reasonable to deem that a separate agreement was made to exclude transportation expenses and holiday allowances from the average wage, which is the basis for calculating the amount of retirement allowances, and that the aggregate amount of retirement allowances and continuous service payments received by a worker at the time of retirement, clearly exceeds the amount of retirement allowances under the Labor Standards Act

[1] Article 34 of the Labor Standards Act / [2] Article 34 of the Labor Standards Act

[1] Supreme Court Decision 95Da49233 delivered on February 28, 1997 (Gong1997Sang, 895) Supreme Court Decision 97Da21086 delivered on January 20, 1998 (Gong1998Sang, 565)

Plaintiff 1 and 23 others (Law Firm Love, Attorneys Na-ho et al., Counsel for the plaintiff-appellant)

Central Daily Co., Ltd. (Law Firm Maw Co., Ltd., Counsel for the defendant-appellant-appellant)

Seoul High Court Decision 2001Na51710 delivered on June 19, 2003

The judgment below is reversed and the case is remanded to Seoul High Court.

1. The court below, based on its evidence, found the facts that the defendant company did not include the transportation expenses (fixed amount of 105,00 won per month) and the average wages which form the basis for calculating the retirement allowances when it calculates and pays the retirement allowances to the retired workers, and rejected the defendant company's payment of the average wages, including the average wages in the collective agreement, wage agreement, employment rules, etc. of the defendant company, and the amount calculated by dividing the wages including the overtime work allowances for three months before the retirement by three, and the amount calculated by dividing the total bonus for one year before the retirement by 12". The court below rejected the defendant company's payment of the retirement allowances under the premise that the defendant company's payment of the retirement allowances was not clearly excluded from the average wages and holiday work allowances, since it does not include the items that constitute the "wages" under the wage agreement, including the average wages, overtime and night work allowances, and the above transportation expenses and holiday work allowances, since it did not constitute the defendant company's regular payment of the retirement allowances and holiday work allowances under the Labor Standards Act.

2. However, it is difficult to accept such a measure by the lower court in light of the following.

A. Since the provisions of the Labor Standards Act on retirement pay provide the lowest limit of the amount of retirement to be paid to the retired employee, there exists a separate agreement between the labor and management to choose not to be the basis for the calculation of the amount of retirement allowance which may be included in the average wage as stipulated in the Labor Standards Act in light of the nature of the benefits, and if the amount of retirement allowance calculated under such agreement is below the lowest limit guaranteed by the Labor Standards Act, such agreement shall not be deemed null and void as it violates Article 34 of the Labor Standards Act (see Supreme Court Decision 97Da21086 delivered on January 20, 198). Such separate agreement can be made implicitly (see Supreme Court Decision 95Da49233 delivered on February 28, 197).

B. As acknowledged by the court below, the transportation expenses paid each month as fixed and holiday work allowances paid under the above agreement on holiday work, etc. constitute wages to be included in the average wages as stipulated by the Labor Standards Act in light of their nature. However, according to the records, the scope of "wages" is limited to the main pay, overtime and night work allowances, job allowances, and position allowances, and collective agreements of the defendant company include the amount of "average wages x retirement allowances x 0 years of continuous service" as well as the amount of "the average wages x 0 years of continuous service x 0.0 days of continuous service x 5.0 days of continuous service x 0.0 days of continuous service x 5 days of continuous service x 5.0 days of the above transportation expenses x 10.0 days of continuous service x 2% of the average wages of the defendant company as well as the amount of the retirement allowances applied to the retirement allowances which were actually paid to the defendant company for 60% of the total amount of the retirement allowances at the time of the plaintiffs' assertion.

C. Despite the above circumstances, the court below accepted the plaintiffs' claim seeking the difference between the retirement amount already received and the retirement amount calculated including the above salary item on the premise that there is no agreement between the labor and management excluding the basic wage for calculating the retirement allowance for the transportation expenses and holiday work allowances. Such a measure of the court below is not erroneous in the misapprehension of the interpretation of the "wages" under the collective agreement and the wage agreement of the defendant company, and therefore, the defendant's ground of appeal pointing this out is with merit.

3. Therefore, the judgment of the court below shall be reversed, and the case shall be remanded to the court below. It is so decided as per Disposition.

Justices Lee Yong-woo (Presiding Justice)